Money Supply – Exploding Inflation

[SK in CV]

[quote=sdduuuude]The graph shows 7 years of money supply increase.
Inflation has, in that 7 years, been unremarkable.

Seems if the increase in money supply was going to cause major inflation, we would see some movement by now. Something else must be in effect.

I’m with Arraya and Econ Prof on this one.[/quote]

There are at least 2 kinds of inflation. Consumer price inflation, as most commonly measured (however flawed) in the US by the CPI. And monetary inflation, as measured by increases in money supply.

Austrian economics, which had a productive origin in the late 19th and early 20th century (and has pretty much stagnated in an idealogical circle-jerk since then) focused on monetary inflation and (theoretical) price deflation. It’s not incorrect. It’s just not always useful, and shy empirical evidence. From an academic standpoint, Austrian business cycle theory had value. Since then, it’s pretty much, from its subscribers view point, a classical heterodox. For others, it’s simply something to point at and laugh. It’s a joke. Ergo, Ron Paul.

[markmax33]

[quote=Nor-LA-SD-GUY2]Guys I am sorry, I just can’t take this “our currency is going to fail” seriously,
Will we have some serious inflation ? (most likely)
My guess about 7-8% inflation a year for 5 or so years
(that will be bad no doubt about it) but it is also the only way we will ever get out of this mess as well.
Will your un-invested cash in the bank or under your mattress be worth about 50% less than it is now,
(yes most likely).
Are there outrageous Deals on homes in places other than coastal SD right now ?
(YES I at least think so).
If you must live in Coastal SD , sorry I can’t help you and I wish you luck.[/quote]

How can you not take it seriously when it has happened to EVERY currency and I provide you a study of 775 currencies from the past?

“Those who cannot remember the past are condemned to repeat it.”

[paramount]

[quote=SK in CV][quote=sdduuuude]The graph shows 7 years of money supply increase.
Inflation has, in that 7 years, been unremarkable.

Seems if the increase in money supply was going to cause major inflation, we would see some movement by now. Something else must be in effect.

I’m with Arraya and Econ Prof on this one.[/quote]

[/quote]

An otherwise bad economy is almost always a price inflation killer.

[SK in CV]

[quote=markmax33]
If you read about inflation throughout history it happens very rapidly and generally it happens after the money supply has initially expanded. I can’t force you to read history but I can give you a million examples and have listed them in the blog before. Inflation always TRAILS money printing. It takes a while for it to saturate the system and get to the bottom of the food chain. When inflation hits it hits hard and fast. A loaf of bread in Russia was $2 on Monday and $10 on Friday in the 1990s. I’m not sure how that’s Alarmist, that’s a fact.[/quote]

A million examples? Really. Here’s the growth in US money supply over the last few decades. Not sure it really supports your theory.

[markmax33]

[quote=SK in CV][quote=sdduuuude]The graph shows 7 years of money supply increase.
Inflation has, in that 7 years, been unremarkable.

Seems if the increase in money supply was going to cause major inflation, we would see some movement by now. Something else must be in effect.

I’m with Arraya and Econ Prof on this one.[/quote]

There are at least 2 kinds of inflation. Consumer price inflation, as most commonly measured (however flawed) in the US by the CPI. And monetary inflation, as measured by increases in money supply.

Austrian economics, which had a productive origin in the late 19th and early 20th century (and has pretty much stagnated in an idealogical circle-jerk since then) focused on monetary inflation and (theoretical) price deflation. It’s not incorrect. It’s just not always useful, and shy empirical evidence. From an academic standpoint, Austrian business cycle theory had value. Since then, it’s pretty much, from its subscribers view point, a classical heterodox. For others, it’s simply something to point at and laugh. It’s a joke. Ergo, Ron Paul.[/quote]

You show your true brilliance by making false claims with no facts. I show you that every fiat currency fails you and jump in and call the Austrian school names. Good job. That’s why all the Austrian economists predicted the housing bubble, asset bubbles, etc and Ben Bernanke and crew can’t get one thing right. Good job sir, well played.

[markmax33]

[img_assist|nid=15611|title=Us Money Supply Increase|desc=|link=node|align=left|width=100|height=91]

If you knew how to read a graph SK you would realize that is monetary growth percentages PER YEAR. Here is the graph you meant to attach. Stop lying to the people. 10%+ compound growth is sick.

[SK in CV]

[quote=markmax33]I show you that every fiat currency fails…..[/quote]

No, you haven’t. The US currency has not failed. You have failed.

Stop with the absolutes. They’re foolish. How can I even pretend to take you seriously when you begin with such demonstrably false claims? I’m a cat. You’re a dying mouse. Go get a good meal. Come back stronger and put up a better fight.

[markmax33]

[quote=paramount][quote=SK in CV][quote=sdduuuude]The graph shows 7 years of money supply increase.
Inflation has, in that 7 years, been unremarkable.

Seems if the increase in money supply was going to cause major inflation, we would see some movement by now. Something else must be in effect.

I’m with Arraya and Econ Prof on this one.[/quote]

[/quote]

An otherwise bad economy is almost always a price inflation killer.[/quote]

Inflation is based on the MONEY supply. If the fed prints endlessly it will trickle through the system and destroy it. We have China and Japan and other countries owning 1/3 of our debt and they have been propping the Ponzi scheme up, but it can only last so long. I have read before it takes 1.5 years+ for inflation to really hit and we have other forces on our dollar but when it hits, watch the heck out. It’s going to hit hard. It’s a wound up spring ready to explode right now.

[markmax33]

delete

[markmax33]

[quote=paramount][quote=SK in CV][quote=sdduuuude]The graph shows 7 years of money supply increase.
Inflation has, in that 7 years, been unremarkable.

Seems if the increase in money supply was going to cause major inflation, we would see some movement by now. Something else must be in effect.

I’m with Arraya and Econ Prof on this one.[/quote]

[/quote]

An otherwise bad economy is almost always a price inflation killer.[/quote]

Other currencies failed during bad economies and had hyper inflation, read the stories I linked. This is a false comment.

[SK in CV]

I posted the graph I intended to post. It directly contradicts your claim that growth in money supply always leads to price inflation.

This is like t-ball.

[markmax33]

[quote=SK in CV]I posted the graph I intended to post. It directly contradicts your claim that growth in money supply always leads to price inflation.
[/quote]

I told you that there is a delay in the system. I don’t know how you don’t get that. Currencies generally fail VERY rapidly from abuse. It never follows a linear equation as you present. It stores up energy like water behind a dam and then a hole in the dam creates a flood. That is the history of currencies. Hyper inflation is actually:

“Definitions used vary from one provided by the International Accounting Standards Board, which describes it as “a cumulative inflation rate over three years approaching 100% (26% per annum compounded for three years in a row)”, to Cagan’s (1956) “inflation exceeding 50% a month.” [2] As a rule of thumb, normal monthly and annual low inflation and deflation are reported per month, while under hyperinflation the general price level could rise by 5 or 10% or even much more every day.”

You don’t understand that once it goes, it goes. Everyone’s savings are wiped out. This same freaking cycle has happened EVERY TIME and you are turning a blind eye to it.

[scaredyclassic]

Luckily I have no savings

[SK in CV]

[quote=markmax33]
You don’t understand that once it goes, it goes. Everyone’s savings are wiped out. This same freaking cycle has happened EVERY TIME and you are turning a blind eye to it.[/quote]

Every time? Every single time? Not a single exception? (Those are trick questions, be careful.) (And please note, never once have I claimed that inflation isn’t coming. I’m only pointing out that your arguments supporting that prediction are rediculous.)

[SK in CV]

[quote=walterwhite]Luckily I have no savings[/quote]

You might want to get some. Because deflation might be just as likely as hyper-inflation. And when price deflation hits, 0% interest on your savings is a damn good return.

[Author]

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